Slides 2015 for contact 7
- 1. Operations Management PBSB 813 Contact 7 Johan Jordaan jordaan.johan@nwu.ac.za
- 2. Note on the use of these slides • These slides provide the basic theory that I would like you to know. There are many more techniques on the slides that came with the textbook, which are also available on eFundi. As I talk you through this slide show, please stop where you don't understand, go to either the textbook (Heizer and Render) or the Heizer & Render slides and make sure you understand them. If you still do not understand, on the first page that you have to submit is space for you to tell me what you do not understand so that I can cover it in class. • Once you have gone through the slides, go to the template on eFundi and prepare your submissions for the next contact session.
- 3. Operations & productivity (1) Topics covered: Contact 7 Global envi- ronment & strategy (2) Managing projects (3) Forecasting demand (4) Product design (5) Quality management (6) Process design (7) Location decisions (8) Layout decisions(9) Job design & work mea- surement (10) Supply chain management (11) Inventory management (12) Scheduling (13 & 15) MRP & ERP (14) JIT & Lean operations (16) Maintenance & reliability (17) Study school Contact 1 Contact 2 Contact 3 Contact 4 Contact 5 Contact 6 Contact 7
- 4. Outcomes for today's contact OUTCOMES OF THEME O • Describe the principles of lean operations and critically analyse any manufacturing or service process for benefits that could accrue through lean principles • Demonstrate their systematic understanding of the principles of lean operations in a case study • Demonstrate a thorough understanding of the concepts by applying the theory to a real-life community organisation. OUTCOMES OF THEME P • Demonstrate a thorough understanding of maintenance concepts by applying the theory to a real-life community organisation.
- 5. Chapter 16 Theory Lean operations
- 8. What is lean production? • Lean Production can be defined as an integrated set of activities designed to achieve high-volume production using minimal inventories (raw materials, work in process, and finished goods) • Lean Production also involves the elimination of waste in production effort • Lean Production also involves the timing of production resources (i.e., parts arrive at the next workstation “just in time”) • Good housekeeping (5 Ss)
- 9. The Toyota Production System Based on two philosophies: 1. Elimination of waste 2. Respect for people
- 10. Saw Saw Lathe PressPress Grinder LatheLathe Saw Press Heat Treat Grinder Press Lathe Grinder Grinder A 2 BSaw Heat Treat LatheSaw Lathe PressLathe 1 Elimination of Waste 1. Focused factory networks 2. Group technology 3. Quality at the source 4. JIT production 5. Uniform plant loading 6. Kanban production control system 7. Minimized setup times
- 11. Monthly forecast Monthly forecast Daily Lead Time 828 hours Total Cycle Time 316 hours Total Work Time 316 hours Daily Daily Daily Daily Daily Daily Hours CT 2 CT 11 CT 3 CT 180 CT 110 CT 10 C/O C/O 22 C/O 5 C/O 240 C/O 280 C/O 10 Lot 345 Lot 345 Lot 345 Lot 345 Lot 345 Lot 345 Avail 10.5 Avail 10.5 Avail 10.5 Avail 10.5 Avail 10.5 Avail 10.5 Uptime 99% Uptime 60% Uptime 88% Uptime 88% Uptime 88% Uptime 99% HOURS DAYS AT Available Time CT Cycle Time SI Stage Inspection CO Changeover Time IT Idle time UT Uptime 72 2 11 3 180 110 10 12 12 96 60 264 1 1 8 5 22 120Housespermonth 6 0.17 0.92 0.25 15.00 9.17 0.83 Inspections 26 Earthworks Foundations Plumbing Services Wet Trades Finishing trades 312 Production Control Supplier I Customer I I I I I Site agents
- 12. Respect for People • Level payrolls • Cooperative employee unions • Subcontractor networks • Bottom-round management style • Quality circles (Small Group Involvement Activities or SGIA’s)
- 13. The seven wastes • Over-processing • Over-production • Waiting • Defects • Inventory • Motion • Transport • (Talent)
- 14. Video: Lean manufacturing cell • Lean manufacturing cell
- 15. Implementing Lean • Link operations • Balance workstation capacities • Redesign layout for flow • Emphasize preventive maintenance • Reduce lot sizes • Reduce setup/changeover time
- 16. Lean in Services (Examples) • Organize Problem-Solving Groups • Upgrade Housekeeping • Upgrade Quality • Clarify Process Flows • Revise Equipment and Process Technologies • Level the Facility Load • Eliminate Unnecessary Activities • Reorganize Physical Configuration • Introduce Demand-Pull Scheduling • Develop Supplier Networks
- 17. The 5 Ss Sort/segregate – when in doubt, throw it out Simplify/straighten – methods analysis tools Shine/sweep – clean daily Standardize – remove variations from processes Sustain/self-discipline – review work and recognize progress Two additional Ss Safety – build in good practices Support/maintenance – reduce variability and unplanned downtime
- 18. Remove Variability JIT systems require managers to reduce variability caused by both internal and external factors Variability is any deviation from the optimum process Inventory hides variability Less variability results in less waste
- 19. Just-In-Time (JIT) • Powerful strategy for improving operations • Materials arrive where they are needed when they are needed • Identifying problems and driving out waste reduces costs and variability and improves throughput • Requires a meaningful buyer-supplier relationship
- 20. Inventory Inventory is at the minimum level necessary to keep operations running JIT Inventory Tactics Use a pull system to move inventory Reduce lot sizes Develop just-in-time delivery systems with suppliers Deliver directly to point of use Perform to schedule Reduce setup time Use group technology Table 16.2
- 21. Reduce Lot Sizes Figure 16.4 200 – 100 – Inventory Time Q2 When average order size = 100 average inventory is 50 Q1 When average order size = 200 average inventory is 100
- 22. Lower Setup Costs Figure 16.5 Sum of ordering and holding costs Holding cost Setup cost curves (S1, S2) T1 S1 T2 S2 Cost Lot size
- 23. Quality Strong relationship JIT cuts the cost of obtaining good quality because JIT exposes poor quality Because lead times are shorter, quality problems are exposed sooner Better quality means fewer buffers and allows simpler JIT systems to be used
- 24. Chapter 17 Theory Maintenance and reliability
- 25. Strategic Importance of Maintenance and Reliability Failure has far reaching effects on a firm’s Operation Reputation Profitability Dissatisfied customers Idle employees Profits becoming losses Reduced value of investment in plant and equipment
- 26. Maintenance and Reliability The objective of maintenance and reliability is to maintain the capability of the system while controlling costs Maintenance is all activities involved in keeping a system’s equipment in working order Reliability is the probability that a machine will function properly for a specified time
- 27. Maintenance Strategy Employee Involvement Information sharing Skill training Reward system Employee empowerment Maintenance and Reliability Procedures Clean and lubricate Monitor and adjust Make minor repair Keep computerized records Results Reduced inventory Improved quality Improved capacity Reputation for quality Continuous improvement Reduced variability Figure 17.1
- 28. Maintenance Two types of maintenance Preventive maintenance – routine inspection and servicing to keep facilities in good repair Breakdown maintenance – emergency or priority repairs on failed equipment
- 29. Computerized Maintenance System Figure 17.3 Output Reports Inventory and purchasing reports Equipment parts list Equipment history reports Cost analysis (Actual vs. standard) Work orders – Preventive maintenance – Scheduled downtime – Emergency maintenance Data entry – Work requests – Purchase requests – Time reporting – Contract work Data Files Personnel data with skills, wages, etc. Equipment file with parts list Maintenance and work order schedule Inventory of spare parts Repair history file
- 30. Maintenance Costs Figure 17.4 (a) Total costs Breakdown maintenance costs Costs Maintenance commitment Traditional View Preventive maintenance costs Optimal point (lowest cost maintenance policy)
- 31. Total Productive Maintenance (TPM) Designing machines that are reliable, easy to operate, and easy to maintain Emphasizing total cost of ownership when purchasing machines, so that service and maintenance are included in the cost Developing preventive maintenance plans that utilize the best practices of operators, maintenance departments, and depot service Training workers to operate and maintain their own machines
- 32. Your assignment • Step 1: Make sure you understand the concepts that are covered in this slide show. If necessary, go through it again or study the textbook. The slides by Heizer & Render (available on eFundi) also give valuable extra information. • Step 2: Prepare a one-page summary of the theory. Make sure it fits into the template in the study guide. Remember to make a note of those issues that you want explained in class. • Step 3: Find out how new product development and quality management takes place in your organisation. Give a one-page summary on the template. • Step 4: Critique the way quality management takes place in your organisation. Where necessary, suggest improvements. Give a one-page summary on the template. (If there are diagrams, you are allowed a fourth page for them). • Step 5: Submit your three-page report on efundi before Thursday night 23:59. This counts towards your individual assignment and your final pass mark! • Step 6: For your group assignment, prepare a three-slide PowerPoint show: Slide 1: Briefly present the essence of quality management to your community organisation. (If it is important to them, you could do new product development instead. Slide 2: Explain whether/how they presently do quality management. Slide 3: Give them advice on how to improve their quality management process. Use the template that is on eFundi. One group member must submit on efundi before Thursday night 23:59 as well! • Names of both documents must be as indicated in your study guide.